Investors leaving the UK might ask:
- Can I keep my stocks?
- Should I keep my stocks?
Though there are significant tax and administration implications, in principle, you can maintain your stocks if you leave the UK.
Your ability to make contributions to some accounts, such as Individual Savings Account, may have ended, but you may still keep your other UK-based investments too.
The ability to diversify your portfolio with foreign stocks, bonds, or funds becomes available to expatriates through offshore investment. It may also have a strategic advantage, particularly with regard to tax savings and flexibility.
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).
This includes if you are looking for alternatives or a second opinion.
Some of the facts might change from the time of writing, and nothing written here is formal advice.
For updated guidance, please contact me.
Stocks and Offshore Investing
If you move abroad, the majority of UK-based investment platforms let you keep your current investments.
This implies that following the tax year in which you go overseas, you can keep your stocks, but you will typically not be allowed to fund new accounts—like ISAs—after that point.
If you relocate overseas, you might have to pay capital gains tax on any income you make from your investments in your new residence.
Gains from international investments may be subject to different tax laws in your new country, even though the UK does not impose CGT on assets owned by non-residents.
The UK and your new nation will determine your resident status, which will affect your levies. The tax regulations of your new home will apply to any taxes you owe after selling investments while you are residing overseas.
To minimize prospective tax obligations on your income and investment profits, it is critical to comprehend the tax laws in your new nation.
How to protect your stocks
Maintain an active UK investment account to safeguard your UK equities when you live abroad.
While new contributions may be prohibited in certain accounts, most platforms let you keep your current holdings.
To prevent interruptions, let your provider know that you have moved.
Agreements to avoid double taxes may be able to help.
Take into account offshore platforms for offshore asset protection and tax efficiency.
For assistance with the complexity of cross-border transactions, keep thorough records for tax filings and speak with an expat financial advisor.
Should I hold my stocks when leaving the UK?
Now onto the matter of holding stocks, the entire decision rests on your shoulders.
It could be advantageous to hold onto your investments if you intend to return to the UK in the near future.
That being said, it would be wise to review your investment plan if you wish to remain overseas for an extended period.
Your own situation, particularly the length of your target stay overseas and your financial objectives, will determine if you should keep your stocks when you leave the UK.
When should I exit a stock?
Determine clear profit goals in line with your chosen investing approach.
Offloading stocks before leaving can help you sidestep capital gains tax in your new country.
As things stand, if you depart from the UK for longer than five years, you won’t be required to pay CGT; future law may change this.
It’s quite difficult to time the market, and frankly, it’s futile.
The choice to sell stocks should be made with the UK’s tax laws, current market conditions, and individual financial targets.
Benefits of Offshore Investing and Some Considerations
When living abroad, you might want to consider offshore investing.
By diversifying your investments across many nations, industries, and currencies, it can lower overall risk and increase returns.
Albeit you will still be required to pay taxes in your home country, some nations provide benefits to foreign investors regarding levies, such as reduced rates on dividends and capital gains.
Asset protection is another benefit of offshore countries, which makes it more difficult for creditors or domestic lawsuits to access your investments.
More opportunities, such as those in developing markets, become accessible through offshore investing.
Investing abroad can help you meet your offshore obligations and protect yourself from your native currency’s decline too.
Considerations
You are not allowed to add to UK-specific accounts, such as ISAs.
When comparing offshore versus local investing, there can be more expenses and regulations involved.
Knowing the tax issues in your new nation and any applicable double tax deals is crucial.
To make sure your investing strategy fits your objectives and expat status, it is imperative that you consult someone with expertise.
Pained by financial indecision?
Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
